Hornby is not happy over proposals suggested to switch up its boardroom, notably by removing chairman Roger Canham.
Ian Alexander Anton sent the company a letter, on behalf of himself and New Pistoia, Hornby’s second largest shareholder with a 20 per cent stake, demanding a meeting to vote on the proposals earlier this month.
In a statement, New Pistoia described Hornby’s five years under Canham as “disastrous”, saying the firm had lost £31m. The firm said Hornby’s current strategy is “ineffective, will continue to destroy value and is not aligned with creating wealth for all shareholders”. It also said that the Phoenix’s majority shareholding was not “in accordance with principles of good corporate governance”.
Today, directors at the toymaker behind Scalextric cars and model railways, have rebuffed the proposals, saying the move would not be "in the best interests of the company or its shareholders as a whole".
They added that the turnaround plan was already picking up pace and that most shareholders were supportive.
The Hornby board said "the strategy currently being pursued by the board is well thought-out and is working", while the current structure and composition of the board "is consistent with good corporate governance".
The directors will call on investors to reject the proposals to remove Canham from office as a director of the company and to appoint Ian Alexander Anton as a director of the firm. It has already received the backing of shareholders representing a 54 per cent stake, including Phoenix Asset Management, Ruffer and Downing.
It comes after Hornby announced it had ticked off the first phase of its turnaround plan at the beginning of the month, restructuring its UK and European operations.
The firm has been trying to get back on the right track after a bumpy ride. In February last year, chief executive at the time Richard Ames left after the firm's third profit warning in five months.